Dow slips 220 points as spiking COVID-19 cases dent economic-reopening hopes

Mario Tama/Getty Images)
  • US equities slid on Tuesday as spiking COVID-19 infections across the nation revived fears of a lengthy economic downturn.
  • A new report from the Organisation for Economic Co-operation and Development described the virus’s labour-market fallout as “far worse than” that seen during the financial crisis.
  • Economic-reopening plays including airlines and cruises tumbled.
  • Oil fell, with West Texas Intermediate crude sliding as much as 1.8%, to $US39.90 per barrel.
  • Watch major indexes update live here.

US stocks dipped on Tuesday as surging coronavirus infections sparked fresh concerns of a prolonged economic recession.

A new report from the Organisation for Economic Co-operation and Development detailed the risk of a second wave of coronavirus cases. The OECD expects the US unemployment rate to stay elevated at 10.4% through the fourth quarter of the year.

Labour market damage incurred from the pandemic is “far worse than” that seen during the financial crisis and requires an extension to unemployment benefits, the OECD warned.

Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Tuesday:

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Economic reopening plays fell. Royal Caribbean Cruises and Carnival declined alongside airlines including Delta,United, and American.

Novavax spiked after the US government awarded the firm $US1.6 billion for testing and manufacturing its coronavirus vaccine. Tuesday’s grant is the largest yet from Operation Warp Speed, the White House’s plan to rapidly develop and deliver a viable vaccine or treatment for the months-long pandemic.

Elsewhere, Tesla stock continuing its climb through record territory on upgrades from bearish analysts.

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Oil prices declined ahead of data expected to show US gasoline inventories increasing. West Texas Intermediate crude slid as much as 1.8%, to $US39.90 per barrel. International benchmark Brent crude fell 1.5%, $US42.46 per barrel, at intraday lows.

Tuesday’s decline follows a strong upswing to kick off the week. US stocks soared on Monday on the back of China’s biggest single-day equities rally since 2015. Tech giants drove major indexes higher and helped the Nasdaq composite notch a record high. Amazon swung above $US3,000 per share and reached an all-time high of its own.

Now read more markets coverage from Markets Insider and Business Insider:

Stocks could fall 40% in a collapse mimicking the Great Depression, famed economist Gary Shilling says

Goldman Sachs cuts US GDP estimate, now sees economy shrinking 4.6% in 2020

Bank of America identifies 3 indicators that could make or break the stock market this summer – and warns they’re all deteriorating fast

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